Hksar v Sailesh Lachu Hiranandani

Judgment Date29 June 2010
Year2010
Judgement NumberCACC448/2009
CourtCourt of Appeal (Hong Kong)
CACC000448/2009 HKSAR v. SAILESH LACHU HIRANANDANI

CACC 448/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 448 OF 2009

(ON APPEAL FROM DCCC NO. 264 OF 2009)

______________

BETWEEN

HKSAR Respondent
and
Sailesh Lachu Hiranandani Applicant

______________

Before: Hon Tang VP, Lunn J and Saw J in Court

Date of Hearing: 9 June 2010

Date of Judgment: 9 June 2010

Date of Reasons for Judgment: 29 June 2010

________________________________

REASONS FOR JUDGMENT

________________________________

Hon Tang VP:

Introduction

1. The applicant was convicted by Deputy District Judge Woodcock of 5 counts of fraud, contrary to section 16A of the Theft Ordinance, Cap. 210. He was sentenced to imprisonment for 2 years after he has made full restitution. His application for leave to appeal against sentence was dismissed as it was not pursued.

2. The prosecution’s case, which the learned judge had found proved, was that the applicant had promised Ijas Ali (PW1), that a loan of US$6,500,000 would be provided to L’Sure Golf Tourism Pte Ltd (“Leisure Golf”).

3. PW2, Mr Soorali Imthiza, and PW3, Mr Gopalaratham Sundaresan, are Indian nationals and directors of a company, Heritage Golf Private Limited (“Heritage”). They had plans to build a golf club house with facilities and a residential project attached to it in Mysore, India. Heritage was looking for loans to build this resort. PW1 was a friend and a businessman from Singapore who wanted to get involved with and to invest in this project. He stood to gain by helping to procure the loan. In return for doing so, PW1 would receive a service fee, a bungalow on the golf course, and that all future imports would have gone through his import business. The applicant was introduced to PW1 to PW3 by Mr Sharma Ramkhumar as a businessman who could arrange such a loan.

4. In order to obtain a loan, PW1 had paid and procured payments to be made to the applicant or the applicant’s nominee(s). For jurisdictional reasons, not all such payments have resulted in charges. The payments which have resulted in the charges will be detailed below.

5. Eventually, a bank draft purportedly issued by Deutsche Bank (Cayman) Limited, for US$6,500,000 payable to Leisure Golf dated 24 July 2007, was provided on 18 September 2007. The bank draft was presented to a HSBC branch in Mauritius on 26 September 2007 by PW1 for presentation to the Cayman Island Deutsche Bank. There is no dispute that the bank draft was found to be a fake.

6. According to the learned judge:

“6. The issue in this case is whether it was the defendant who induced the victim to pay him various sums of money on several occasions in return for a loan of $6.5 million, or whether the defendant is only an innocent middleman, a middleman who did not ask for or receive any payments over a period of time but is now being falsely accused because the actual con man has since disappeared.

……

64. The defence cross-examined all the prosecution witnesses on the basis that they were all lying, framing the defendant, concocting their evidence and making forgeries.

……

77. The defence does not argue that the victim was not a victim of fraud but that it was Gandhi and not the defendant that committed the offences. …”

The facts

7. The facts have been fully set out in the Reasons for Verdict (“Reasons”). I will state them as briefly as possible here.

8. In December 2005, PW1 to PW3 met the applicant in his office. The applicant told them that he could arrange a loan. He had a plush office in an expensive area in Kuala Lumpur. According to PW3, the applicant had explained that he could mortgage properties in UK at a lower rate and lend it to Heritage at a higher rate. On 4 April 2006, an offer letter was signed in the same office at a second meeting. The applicant, PW1, 2 and 3 were present. Exhibit P38 is the offer letter. In the offer letter, Heritage was stated to be the borrower and the lender/arranger was Universal Alliance Limited of London. The offer letter was signed by the applicant as an authorised signatory.

9. According to PW2, the applicant had told them in the December 2005 meeting that he was a director of Universal Alliance. PW1 also recalled that the applicant told him that he owned this company.

10. It transpired that it was difficult for a UK-based company to invest directly in India, so it was agreed that the PW1 should set up a company in Singapore to borrow this money and in turn invest it in India. The company was Leisure Golf which was incorporated on 8 May 2006. As a result, PW1 and PW2 signed an investment agreement (Exhibit P37) to reflect their respective roles and relationships.

11. On 10 May 2006, PW1 and PW3 met the applicant in Kuala Lumpur. The applicant requested a refundable deposit to be paid. That was paid in Singaporean dollars by way of cheque in a sum of SGD68,200. The cheque was made payable to Just Vision Media Pte Limited (“Just Vision”), a company of the applicant. The applicant signed a letter on 10 May, acknowledging receipt of the cheque. That is an admitted fact.

12. On 19 May 2006, an agreement dated 20 May 2006 (“the funding agreement”) was signed in duplicate, according to the prosecution, in the applicant’s office in Kuala Lumpur. According to PW1, he signed on behalf of Leisure Golf and the applicant for the lender Universal Alliance. According to PW1, he and the applicant initialled each page (15 pages) and signed on the last page of the agreement. PW2 and PW3 were present. According to PW1, the originals were kept by the applicant, so that they could be notarised in the UK by lawyers. He was given a copy, which is Exhibit P1. There is a reference in the recital to “notary” although the language is not entirely clear. Although the applicant had said that he would send an original to PW1 after notarization, PW1 had never received one. According to the defence, a funding agreement was signed by a Mr Gandhi and PW1 (what purported to be an original was produced by the defence as Exhibit D1), the applicant was not present when it was signed, Exhibit P1 is a fake document, and the applicant had not signed or initialed Exhibit P1.

13. On 31 May 2006, PW1 paid, at the applicant’s request, the agreed lawyer’s fees of ₤23,000 and he did that by telegraphic transfer to Greenspan & Mechs Limited, London (“Greenspan”). A remittance advice was faxed by PW1 to the applicant. PW1 received Exhibit P47 as an attachment to an email from the applicant. P47 is an invoice from Greenspan for ₤23,000 “towards legal, technical consultancy and financial engineering charges”.

End of June 2006

14. The applicant asked PW1 to come to Hong Kong to see the bank draft. PW1 and PW3 came to Hong Kong but they could not find the applicant. After staying a week in Hong Kong, they returned to Singapore, shortly thereafter he received another phone call from the applicant to come back to Hong Kong.

6 July 2006

15. On that day, PW1 and PW3 went to the applicant’s office at Ashley Road, Kowloon. There the applicant requested PW1 to pay a further US$257,600 (approximately 4 per cent of the loan value) in return for the bank draft which would be available within one month. He told PW1 it was the last payment required and he had to pay it. PW1 believed the draft was being processed. He did not have enough cash and could only raised US$157,000. The applicant offered to pay the balance of US$100,000. PW1 left for Singapore immediately to arrange this payment.

16. On this visit, however, Exhibit P22 which was drafted by or on behalf of PW1 was given to the applicant. Exhibit P22 is a memorandum of understanding between Leisure Golf and Universal with a recital that Leisure Golf had been offered a loan of US$6,500,000 by Universal Alliance, which was represented by the applicant, its director. That document was not signed but it was found by the police during a search of the applicant’s office.

11 July 2006

17. PW1 made two telegraphic transfers from Singapore to the applicant’s lawyers Greenspan on the applicant’s instructions in the sum of ₤45,600 and ₤40,000 respectively. These two transfers are the subject of charge 1.

28 September 2006

18. PW1 and PW2 went to Hong Kong at the request of the applicant and according to them met for the first time a person introduced to them as Dinesh Gandhi, who was said to be a solicitor from London. The applicant said Mr Gandhi was arranging the funds. Both the applicant and Mr Gandhi assured PW1 that the loan was nearly all arranged and in place. According to the learned judge,

“33. … PW1 was panicking, having paid over so much of his money, and told the defendant he was holding him responsible for the loan. The defendant placated PW1 by introducing him to Mr Gandhi to reassure him the loan was almost available.

34. PW1 asked Mr Gandhi for his business card, but he would not give him one. PW1 could not contact the defendant again in 2006 despite many attempts.”

7 June 2007

19. At the applicant’s request, PW1 went to London to meet him. He met him and a female companion in a hotel in Central London. PW1 pressed the applicant for an explanation for the delay. The applicant suddenly felt giddy and left the hotel, promising to contact PW1 soon. He called PW1 two days later and told him to catch a train to Weybridge to meet him. PW1 sat for two hours waiting for the applicant to pick him up. They went for a meal where the applicant admitted he had problems arranging the funding but that it would be finalized soon. He told him of his personal and business problems. He promised PW1 he was arranging funds. PW1 had no choice but to wait and see. He flew back to Singapore to wait.

31 July 2007

20. The applicant invited PW1 to Hong Kong to discuss the bank draft. PW1 met...

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